Target: Tembec Inc. (TSX:TMB)
- Industry: Basic Materials / Industrials
- Acquirer: Rayonier Advanced Materials Inc. (NYSE:RYAM)
- Target: Tembec Inc
- Size: $807 million (including $487 million in net debt)
- Consideration: 63.3% Cash, 36.7% Equity (plus assumption of debt)
- Source of Funds: Internal Cash, Debt and Common Stock
- Sell Side Advisors: Scotiabank and National Bank Financial
- Buy Side Advisor: Bank of America Merrill Lynch
- Legal Advisors: Wachtell, Lipton, Rosen & Katz LLP, McCarthy Tétrault LLP and Hogan Lovells US LLP, Stikeman Elliott LLP, Cahill Gordon & Reindel LLP, Slaughter and May, Dechert LLP
- Expected Close: Q3 2017 or Q4 2017
On May 24, 2017, Rayonier Advanced Materials entered into an arrangement agreement to acquire Tembec for a total purchase price of $807 million, including $487 million of assumed net debt.
The deal will offer a consideration of $4.05 per share or 0.2302 newly issued shares of Rayonier common stock per each Tembec share. The transaction multiples include an implied EV/EBITDA of 5.4x and an implied P/E multiple of 6.4x as per Capital IQ.
The deal will be financed using a $365 million of cash on hand, $450 million fully committed bank financing, and $110 million of new RYAM common shares. The committed bank financing was provided by Bank of America, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Wells Fargo.
The deal will provide Rayonier with a more diversified product line and a direct entry point into the Canadian paper products market while cutting any currency risk. Rayonier specializes in high-purity cellulose. Tembec also produces forest products such as high-purity cellulose.
Last month, the United States slapped a 19.88% preliminary duty on softwood shipments from Canadian forestry companies. The deal will support Tembec by providing more resources to maneuver trade disputes between US and Canadian lumber producers and invest in growth opportunities.
Up to $50 million in cost synergies are expected to be achieved by year 3 through a consolidation of duplicate systems and spending, increased production yields, reduced transportation costs, and a more optimized sales channel distribution network.
Target: The Bank of Nova Scotia Berhad
- Industry: Financial Institutions – Banking
- Acquirer: Cathay Life Insurance Co., Ltd. and Cathay United Bank Co., Ltd.
- Target: The Bank of Nova Scotia Berhad
- Size: MYR $1.1 billion (CAD $345 million)
- Consideration: 100% Cash
- Source of Funds: Not Disclosed
- Sell Side Advisor: Morgan Stanley
- Buy Side Advisor: Scotiabank
- Legal Advisor: Not Disclosed
- Expected Close: Not Disclosed
Cathay Life Insurance Co and Cathay United Bank Co signed an implementation agreement to acquire The Bank of Nova Scotia Berhad from The Bank of Nova Scotia for MYR $1.1 billion (CAD $345 million) on May 26, 2017.
The Bank of Nova Scotia was seeking a buyer for its Malaysian unit as part of strategic plans to scale back in Asia to focus on more profitable markets in South America.
Bank of Nova Scotia Berhad specializes in corporate banking with customers in the financial, agricultural and manufacturing sectors with three branch locations in major Malaysian cities.
Cathay Financial Holding Co, the parent company of Cathay Life Insurance and Cathay United Bank, is one of the largest financial holding firms in Taiwan. Cathay Financial is looking to extend its reach in the Southeast Asian banking market. Cathay United Bank will own a 51% stake in Bank of Nova Scotia Berhad, which makes it the first Taiwanese bank to have a subsidiary in Malaysia.